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Home Mortgage Borrowing Up 16%

Home Mortgage Borrowing Up 16%
Borrowing for home mortgages up 16%

4,330.1 million euros was borrowed in May

In May this year there were 34,883 new mortgages registered for housing purchases in Spain, 11.2% more year-on-year.

The total borrowed capital for the new home loans reached a massive 4,330.1 million euros, an annual increase of 16.8%, according to data from the INE.

Interest Rates

Looking at all new mortgages taken in May, the average interest rate at the start of the loan term was 2.54% (2.5% lower than in May 2018), and the average term of the loans was 23 years. 60.6% of new mortgages were taken on a variable interest rate, and 39.4% on a fixed rate.

The average interest rate at the start for variable rate loans was 2.62% (7.3% lower than in May 2018). For fixed rate loans the average interest rate was 3.25% (4% higher).

For mortgages taken for buying a home, the average interest rate was 2.62% (0.6% higher than May last year) and the average term was 24 years. 57.4% of new housing mortgages were taken on a variable rate and 42.6% on a fixed rate. The number of fixed rate loans taken increased by 12.6% when compared to the same month in the previous year.

The average interest rate at the beginning was 2.34% for home mortgages on a variable rate (a decrease of 1.2%) and 3.1% for fixed rate mortgages (1.8% higher).

Results by Autonomous Community

The communities with the highest number of mortgages constituted on homes in May were Andalusia (6,572), Catalonia (6,042) and Madrid (5,816).

The highest amount of capital borrowed for the constitution of home mortgages was seen in Madrid (1,005.5 million euros), Catalonia (896.9 million) and Andalusia (732.8 million).

The communities with the highest annual variation rates in borrowed capital were Extremadura (41.9%), Castilla y León (40.4%) and Catalonia (28.4%).

Castilla y León (40.2%), the Balearic Islands (29.5%) and Extremadura (29.1%) were the communities with the highest annual rates in the number of new home mortgages

On the other hand, the communities with the lowest annual variation rates were the Canary Islands (–37.2%), Navarra (–11.3%) and the Basque Country (0.9%).

 

High Demand for Housing in Andalusia

Home Mortgage Borrowing Up 16%
High Demand for Housing in Andalusia

Demand for housing in Andalusia is up 20%

Over the last 12 months, demand for housing in Andalusia has increased by 20%, according to a report by fotocasa.

In 2019 up to 28% of those over 18 years of age living in Spain have taken action related to the purchase or rental of a property in Spain. This is 22% higher than the numbers seen in the previous year, when only 23% of the same age group were active in the market.

In Andalusia, those participating in the housing market was greater than in the last two years. In 2018 27% were involved in buying or renting a property, while in 2019 that figure has grown to 30%.

Looking at the increase in more detail, it is noted that the demand for rental housing is mainly responsible for the increase across Spain. In 2019 there are more people renting or trying to rent an apartment as well as buying or trying to buy. In fact, the demand for rent in the last year has risen by 56%, from 9% to 14%. The demand for purchasing a property has also increased going up from 9% in 2018 to 12% in 2019, a 33% increase.

In Andalusia, the demand for housing to buy increased by 20% while the demand for rental housing has increased by 21% since last year.

“The interest in the purchase or rental of a home by Andalusians has increased in the last year, especially in the rental market, where the percentage of those active in the rental market has increased by 17%, 3 points higher than the national average (14%). But in both markets it can be seen that there are few who actually manage to secure a property, whether for sale or rent. This fact is closely linked to the evolution of the price of housing, which is growing at a much higher rate than the purchasing power of Spaniards,” explained Beatriz Toribio, director of studies at Fotocasa.

Hard to Find

The percentage of those who are trying to secure a property (buy or rent) but have not yet succeeded, is growing much more than those who have actually acquired a property in the last year. This means that although the market has more people interacting, the percentage of those who have been successful is very similar to that seen in 2018.

In the case of Andalusians, of the 12% looking to buy a property only 3% find what they are looking for with the other 9% still looking.

In the case of rentals, of the 17% of Andalusians looking for a rental property, only 8% have found it in the last 12 months, while 3% are still searching. A further 2% are looking for a shared property (room to rent).

According to the Fotocasa Real Estate Index, the offer price of housing in Andalusia increased by 3.5% in 2018, compared to the national average of 7.8%, and in the case of rentals the increase in prices was 2.5%, compared to the 1.8% national average. Thus, the rental prices are growing quicker than purchase prices, although in Andalusia the price of buying didn’t increase quite as much as it did nationally.

“The price of rental housing on offer has risen sharply in recent years, but we have already begun to detect a slowdown in much of the country, including Andalusia. In the sales market of second-hand housing, prices in this region also grew but at a much lower rate than the country’s average,” added Toribio.

Property Sales Up Slightly in May

Brits made up 14.75% of foreign sales
Andalusia saw 9,100 home sales in May

Andalusia saw 9,100 home sales in May

There were 191,875 property transfers in May, which is 4.4% higher than in the same month last year. This is according to the latest data from the INE.

In the case sales of properties in the property registers, there were 96,186, an annual increase of 3.1%.

85.9% of the sales in May correspond to urban property, and 14.1% to rural. In the case of urban properties, 57.6% were housing sales.

The number of rural property sales increased by 6% in May, on the annual rate, and that of urban properties by 2.6%. Within urban sales, home sales recorded an annual increase of 1.1%.

Results by Autonomous Communities

In May, the total number of property sales in the property registers per 100,000 inhabitants reached its highest values in La Rioja (827), Castilla y León (817) and Aragón (717).

Catalonia (28.2%), Extremadura (19.0%) and the Principality of Asturias (17.5%) registered the highest annual variation rates.

On the other hand, Murcia (-15.2%), La Rioja (-8.5%) and Navarra (-8.3%) saw the lowest annual rates.

Looking at the sale of registered homes, the communities with the highest number of sales per 100,000 inhabitants were Valencia (193), Balearic Islands (161) and La Rioja (141).

The communities that saw the largest annual increases in the number of purchases of homes were Asturias (41.0%), Cantabria (19.6%) and Castilla y León (14.1%).

Navarra (-17.7%), La Rioja (-15.0%) and the Canary Islands (-11.2%) registered the most negative annual variation rates in May.

In Andalusia there was 9,100 home sales in May. This represents a slight fall of -1.7% when compared to May in 2018.

 

Average Mortgage Value Increased in April

Average Mortgages Value Increased in April
Average Mortgages Value Increased in April

Interest rates fell 5.1% in April

The number of new mortgages taken on homes in April was 29,032, which is 0.1% less than in April 2018. The average amount of the loans was 124,655 euros, an annual increase of 0.7%, according to data from the INE.

The total capital loaned on properties in April reached 5,325.6 million euros, a 2.6% fall when compared to the previous April. For housing, the total capital borrowed was 3,619 million euros, a slight increase of 0.6%.

Interest Rates

For all mortgages taken in April, the average interest rate at the start of the loan term was 2.51% (5.1% lower than in April 2018) and the average loan term was 23 years. 58.7% of mortgages began on a variable rate, with 41.3% at a fixed rate.

The average interest rate at the start of the term for variable rate mortgages was 2.23% (6.4% lower than in April 2018). On fixed rate loans the average rate at the start was 3.07% (4.8% lower than last year).

Looking only at mortgages taken for the acquisition of a home, the average interest rate was 2.59% (2.9% lower than last April) and the average loan term was 24 years. 56.8% of new home mortgages taken in April were on a variable rate, and 43.2% on a fixed rate. The number of fixed rate loans increased by 6.7% year-on-year.

The average interest rate at the start of the loan term for home mortgages on a variable rate was 2.3% (a decrease of 5.1%), and 3.09% for fixed rate mortgages (1.8% lower).

Results by Autonomous Community

The community with the largest number of new mortgages taken in April was Andalusia (6,065). Madrid and Catalonia were next with 5,380 and 4,636 new loans, respectively.

The community to see the most capital loaned for a home purchase was Madrid where 936 million euros were borrowed in April. Andalusia and Catalonia were next with 676.2 million and 657 million euros, respectively.

The highest annual variation rates in the total capital loaned was seen in Navarra with a 59.4% increase. Andalusia and Aragon were next with increases of 26.8% and 26%, respectively.

The highest annual increase in the number of new mortgages taken for purchasing a home was seen in Navarra (47.4%), while in Andalusia there was a 16.7% increase and a rise of 15.1% in Rioja.

On the other hand, the communities that saw the largest negative variations were Murcia (-25.8%), the Balearic Islands (-22.4%) and Madrid (-10.3%).

 

Cost of Renting Increased in April

Renting is 0.8% more expensive in Spain since May
Renting is 0.8% more expensive in Spain since May

Renting is 0.8% more expensive since May

In April, the cost of renting a home in Spain registered a monthly increase of 0.8% to put the average cost per square metre at 8.54 euros per month. This price returns us to figures similar to those seen in December 2009, when the price stood at 8.55 euros/m² per month.

Looking at the annual variation, the price of renting a property in Spain increased by 1.2%, one of the softest increases over recent months, except for August 2018 and January 2019 when the year-on-year variations registered slight decreases. Specifically in the month of August 2018 the price fell by -2.2% and in the month of January 2019 by -0.7%.

The average rental price continues to grow, but at a much more moderate pace than we have become used to recently. Additionally, it is recognised that the evolution of prices is very different according to the area. In some autonomous communities there have already been significant falls, while in others such as Madrid or Valencia they continue to see large increases,” exlained Beatriz Toribio, Director of Studies of Fotocasa.

Since reaching the maximum price in May 2007 (€10.12 /m² per month) the price of rental housing has accumulated a fall of -15.6%.

13 Communities See Increases

Looking at the prices by autonomous communities, 13  saw the cost of renting increase in May. The community that saw the largest inrease was Murcia where rental costs increased 5%. La Rioja saw prices rise 4.9%, while both Navarra and the Balearic Islands saw rises of 2.8%. Renting in the Canary Islands grew more expensive by 2.5%.

Three communities saw prices fall in May. The community where rental costs declined the most was Madrid (-1.9%) while the smallest drop was seen in Castilla y León, with a fall of -0.2%.

The price of renting in Andalucia increased by 0.9% in May.

In terms of price ranking, Madrid is the most expensive community in which to rent a second-hand home, with an average price per square metre of 13.43 euros / month. On the opposite side, Extremadura and La Rioja are the two cheapest communities for rental property with average prices of 4.31 euros/m² per month and 4.95 euros/m² per month, respectively.

Looking at the provinces, 31 of them recorded monthly increases in rental costs compared to the previous month. The increases ranged from 6% in Girona to 0.1% in both Badajoz and Cuenca. Meanwhile, rental costs registered negative monthly variations in 14 provinces. Those falls ranged from -0.1% in Cádiz to -3.3% in Lugo.